we will introduce a bill for Targeted Delivery of Financial and Other Subsidies, Benefits and Services by using the Aadhar frameworkThe bill will be introduced in the current Budget Session of the ParliamentThe Aadhar number or authentication shall not, however, confer any right of citizenship or domicileA social security platform will be developed using Aadhar to accurately target beneficiariesThis will be a transformative piece of legislation which will benefit the poor and the vulnerable

At Indicus, we await full details of this Bill as the pending legislation has been a consistently called out by us in our policy briefs and op-eds - See

The Economic Survey 2015-16 has an excellent chapter analysing the progress of JAM and impediments to its further spreadThe Chapter Spreading JAM across India's Economy analyses the existing schemes to conclude that the Centre should prioritise areas where it has the highest control over the first- and middle-mile factors and leakages are highFertiliser and within-government transfers stand out as good candidates.

There are clear maps that show the inadequacy of the last mile reach of the banking network and the varied penetration of mobile coverage across statesA JAM Preparedness Index has been constructed in rural and urban areas across states: There is as expected significant variation across statesWhen it comes to urban areas, some, like Madhya Pradesh and Chattisgarh, show preparedness scores of about 70 per centOthers, like Bihar and Maharashtra, have scores of only about 25 per cent. The DBT rural preparedness scores are significantly worse than the urban scores, with an average of 3 per cent and a maximum of 5 per cent (Haryana).

The analysis concludes that unless the bank network is fixed at the last mile, the best strategy for the government is to go for BAPU - in other words - Biometrically Authenticated Physical Uptake. Beneficiaries verify their identities through scanning their thumbprint on a POS machine while buying the subsidised product—say kerosene at the PDS shopThis calls for automation of all PDS shops as well as installing Aadhaar-enabled POS machines at these shops.

The chapter notes: BAPU preparedness is much better than for Rural DBT preparednessThe average state preparedness is 12 per cent (Figure 12), but there are some states – like Andhra Pradesh (96 per cent), Chattisgarh (42 per cent) and Madhya Pradesh (27 per cent) – that with some policy push could be well-prepared for BAPU in the near future.

On 24th February 2016, the Cabinet approved of a slew of measures to encourage digital paymentsThe Press Release noted:

The essential features of the proposals for promotion of payments through cards and digital means include steps for withdrawal of surcharge/service charge/ convenience fee on card/ digital payments currently imposed by various Government Departments/organisations and introduction of appropriate acceptance infrastructure in Government Departments/ organisations; rationalization of Merchant Discount Rate (MDR) on card transactions and a differentiated MDR framework for some key transaction segments; mandating payments beyond a prescribed threshold only in card/ digital mode; introduction of formulae linked acceptance infrastructure by the stakeholders of certain card products; rationalisation of telecom service charges for digital financial transactions; promotion of mobile banking; and creation of necessary assurance mechanisms for quick resolution of fraudulent transactions and review the payments ecosystem in the country.

At the Annual Conference of Banking Ombudsmen 2016 (February 15-16, 2016), the RBI Governor DrRajan announced a renewed emphasis on customer service : Incognito visits to bank branches by RBI officials will be initiated to check the culture towards customer complaints in banksIn addition, there would be a review of how banks have implemented the Charter of Customer Rights.

"Customers must have the right to access banking services and to the grievance redressal machinery - to banks' internal mechanism for grievance redressal as well as the Banking Ombudsman Scheme of the Reserve Bank - so that they are not 'excluded' from the banking fold, he exhorted the banksWebsites, mobile phones, missed calls, physical places, and collection points could be some ways to aggregate customer complaints for redressal, he pointed outHigh level of automation would not only allow customers to access the grievance redressal machinery at anytime from anywhere but also reduce the cost of grievance redressal.

Explaining the growing importance of customer awareness, customer protection and customer literacy, the Governor stated that a large segment of the population was not comfortable entering a bank even todayMoreover, only a fragment of the customer complaints came from rural areasThis clearly showed the urban bias and lack of awareness among the new entrants about customer grievance redressal processes"We want the new entrant to be comfortable in asking not only for banking services but also about redressal of grievances, he exhorted bankers.

Referring to the complaints of mis-selling of third party products by banks, the Governor stated that the findings of some recent incognito visits undertaken by the Reserve Bank on sale of third party products by banks and a study undertaken by some academicians/consumer activists, had hinted at mis-selling of products, especially insurance products, by banksThe findings had been shared with the Indian Banks’ Association for examination with a view to bringing about an appropriate industry practice in this this regardHe further added that the Reserve Bank was exploring ways to resolve customer complaints across regulators through forums, such as, Financial Stability and Development Council (FSDC)An ill-informed customer tends to make sub-optimal choices, the Governor stated and added that the Reserve Bank might even consider regulatory action against banks if they continued mis-selling of their products.